Opinion
Certainty Blog
We have lost our way – Part 1: The ‘Wealth Management’ moniker
Since emerging around a decade ago, the term ‘Wealth Management’ has become a sort of default moniker for a wide range of financial services and offerings, similar to ‘climate change’, ‘fat-reduced’, and ‘social networking’. The term has been used (and abused) by many...
Commissions, rebates, and the Future of Financial Advice
How would people feel if some of the money they paid when buying their house included a payment from the local government authority back to the real estate agent? How about if the payment was made not just in the year of purchase, but every year that person owned the...
Reflections on Advice – Part 2: Emerging trends and what to do about them
In Reflections on Advice – Part 1, we examined where the financial marketplace is heading following the latest release of details surrounding the proposed Future of Financial Advice (FOFA) legislation. We’ll now look at the other two issues we said every Australian...
Reflections on Advice – Part 1: The future financial advisory marketplace
Our industry is being compared to used-car sales again (“Shorten throws down the gauntlet”, Sally Patten, Australian Financial Review, 29th April 2011, p. 48). This is obviously a slur against used-car salespeople. Seriously, the latest release of details surrounding...
Trustees, deep pockets, and boutiques
In his article “Opportunity still knocks – be sure to read the fine print”, Stuart Washington points out that the investment and superannuation industry is finding the emergence of trustees’ liability rather unpalatable. Sandhurst, Fincorp’s trustee, doesn’t think it...
Same old, same old …
In his article regarding the emerging liability of fund trustees (“Opportunity still knocks – be sure to read the fine print”), Stuart Washington points out that the current set-up requirements for trustees and responsible entities, namely $5 million in capital and an...
Advice – Charting a course through the storm
In her recent SMH Money article – “The boom and the gloom” – Nicole Pederson-McKinnon again draws our attention to Australia’s two-speed economy. If you’re not riding the mining boom, she says, you’re probably finding the financial landscape rather gloomy. The...
FOFA – Paternalism or necessary leadership?
IPA Executive Director John Roskam’s article “Paternalism Enshrined” was published in the Australian Financial Review on 6 May 2011. In it, he makes some good points regarding the proposed regulation of financial advisers under Future of Financial Advice (FOFA)...
Advice Mapping – Part 2: Constructing Advice Maps
As discussed last week, Advice Mapping is an important piece in the engagement, the articulation of your value, and the management of your advice clients. We also pointed out that the first crucial steps for you to implement Advice Mapping are to read up on mind...
Advice Mapping – Part 1: Getting your client’s financial life on a single page is crucial to engagement
A picture paints a thousand words, right? If your firm can learn to capture the essence of a client’s financial life in a picture on a single page, and then use that one page for every client meeting as the driving document underpinning your advice relationship, I...
The Slow Death of OldCo
Accumulating evidence suggests that the old financial planning industry (OldCo) is entering its death phase. Effects on advisers and their business plans will be profound. There is no single emerging trend, no single piece of legislation. Just a mounting pile of...
2011 Cultivating Advice Workshops commence 13 May
The Australian financial advice marketplace is changing fast. Advice firms wanting to thrive in the inevitable commission-free, opt-in/opt-out, fiduciary-based market environment must position themselves to hit the ground running. Are you ready to be one of these...
Engaging advice clients “…at a different level”
It's a totally different form of engaging with clients. Graeme Richardson & Tony Dass from Argonaute Financial Advisors in Launceston, were sharing their insights with me yesterday regarding the implementation of their Discovery meetings for existing and new...
Opt-in? Yes please!
Asking clients to opt-in every year in an advice relationship is one of the recommendations of the Future of Financial Advice (FOFA) reforms. The advice professions of law, medicine, dentistry, accounting, engineering, and computing have long embraced the concept of...
Developing Your Advice Team – #1
Ten years ago I ran a workshop on the topic of "Developing Your Team" (or some topic like that) for a group of about 20 advisers in Queensland all from a large national financial planning group. It was a disaster. I took the view (stupidly in retrospect) and built the...
What’s got loads more influence on how financial services will be delivered than FOFA?
How are you feeling about the proposed Future of Financial Advice reforms? The FOFA reform proposals include – removal of commissions from some superannuation products implementation of a 'fiduciary' responsibility on all advisers introduction of opt-in clauses every...
Falling for the new product offers from Super Funds?
The big boys are getting more aggressive. The Fin Review this week headlined with "Super Funds fight to keep members" (Stephen Shore Page, 7th December, 1 & 12) detailing how these giants will begin offering daily share trading facilities in their efforts to win...
2010: The End of Overpriced Client Bases
I’ve been telling as many advisers I can that 2010 has to be about the peak of business valuations for most of today’s financial planning businesses. Therefore, these have to be the best of times to consider selling, particularly inactive financial planning client...
Pricing advice in the country…
I've just had a great day working with advice firm in Launceston, Tasmania. They have everything going for them - great reputation, loyal clients, talented team, good location, great office, great quality advice - except they lack one key aspect. Self-belief. They...
Career as a financial adviser?
In a usual week, we receive one unsolicitored CV or enquiry from an aspiring adviser looking for a new advice firm they hope will better progress their career. They've read our stuff and figure we can provide introductions to the firms they seek. This week however, we...
How to set Minimum Price…
Troy MacMillian in Perth runs one of the advice firms of the future. His firm, The Wealth Designers, is finding it hard to manage the overwhelming demand for their advice services. They are now using minimum pricing as a tough, but effective means of handling the...
Hidden Commissions…
Do you think about the wage of the barista when you buy your favourite coffee? Ok, neither do I. But, think about it for a second. Do you expect the wage for your favourite barista to be somehow reflected in the price of your coffee? For that matter, do you expect the...
Assessing the performance of a financial advice firm
I met with a group of great up and coming advisers last week. They spoke about their plans of how they are building their advice businesses. They were eager to understand any 'rules of thumb' that might support their efforts to build sustainable and profitable advice...
Financial Advice at $300?
What is your financial advice worth? For me, the recently announced research findings from Investment Trends that suggested that advice is worth about $300 confirms the misconceptions that abound in the minds of advisers, customers, institutions and research houses...
Our Business Lives are what our Business Thoughts make them
Most firms that engage our consulting services want three outcomes: to build a business that is independent of any one person’s personal efforts in the areas of sales, administration, advice or management; to grow a community of ideal clients who value their services...
What does a true advice proposition look like?
Good painters don’t paint on top of previously painted, cracked, chipped, well-worn exteriors without first preparing the surfaces. Dodgy renovators, when their work is not subject to close inspection, can easily deceive their clients with their fresh and shiny...
Case Study – The Importance of Attitude and Intent
To some, it might appear odd that none of the four sons of a prosperous farming family – based near Narrogin, in Western Australia’s glorious south-east wheat belt – didn’t continue on the land. However, on meeting Rob and Michael Pyne of HPH Solutions in West Perth,...
Going fee-for-service? Beware the traps…
80% of the fee for service models within Australian financial planning firms won’t work in three years time. In their quest to get “legislation-ready” for Monday 2nd July 2012, most planning firms are not thinking through their hastily implemented fee for service...
Our clients want greater financial certainty
Financial advice is only required when people lack financial certainty. Considering the heap of uncertainty in the financial world at present, I wonder why the advice revenues of financial advisory firms aren’t increasing at a pace like that of revenues generated from...
Back to the future – a glimpse of July 2, 2012
Imagine it’s Monday, July 2nd, 2012 – the first working day of Chris Bowen’s proposed changes for financial planners. What’s different from today? I’m betting the biggest change won’t be that obvious. The same financial planning brand names may be around, but...
The Mindsets and Stages for Successful Engagements
Implementing a fee for service proposition for your financial planning business without addressing the fundamental issue of adding real value for your clients is akin to getting dressed up as a mighty Sydney Swans player and thinking you’re therefore entitled to play...
Is the fees vs commissions debate just a smoke-screen?
It’s been hard to hear anything else above the din generated by this debate; however, at least two other trends have the potential to make the fees versus commission debate, though important, become a comparative storm in a teacup. Trend 1 – Jeremy Cooper’s review...
Case Study – Converting real clients to real fees
When Glen Penno and Scott Donoghue rang us for advice about pricing a job, they were feeling that all the hard work they’d invested in their new advice proposition and new pricing methods might have been a great big waste of time. In just a few short hours, they were...
Top 4 Business Challenges for 2010
I sit on a number of ‘boards of advice’ of financial advisory firms. These ‘boards’ review business performance, formulate business plans, provide accountability to plans, and assist with the unique implementation challenges of change and development for each firm. To...
Get attached to the client’s world to earn high premiums for your advice
Earlier this month, we ran a workshop with values-based planning guru Bill Bachrach. 185 advisers from around Australia and New Zealand gave up their Saturday and came along for an intensive skilling day, to understand some of the concepts behind Bill’s value-based...
Price on the client’s complexities, not products
One of the criteria for taking advice is needing it. If people don’t believe they need advice, they won’t take it, and they definitely won’t pay a premium for it. People will generally seek advice when they face a complex situation in their lives that they want to...
Please, remind me why I’m paying you?
As confidence in our economic recovery improves, confidence in our financial planning industry seems to be getting worse. As events unfolded last year, clients generally remained loyal to their planners, recognising that most of the greedy, reckless antics causing the...
Are financial planners failing to plan?
It’s ironic that many financial planners may have failed to financially plan for the most important future of all – their own. Change is coming It matters little which stance you take in the debates about commission. The greed behind the global financial crisis, the...
Passion for Pricing Advice
There are few topics in my consulting and training work that I love more than pricing. Here's why. Pricing is emotional Effective pricing isn’t about facts and figures. It’s about courage and value. Good financial advisers aren’t selling motor cars, cups of coffee,...
4 Questions for Planning Beyond this Recession
These are the four most important questions for owners of advisory businesses planning for beyond this recession: Question 1: How are you going to structure your business for forward prosperity? There is little doubt the industry will have to do more with less. The...
Advice Pricing – Part 2: Pricing Committees and Minimum Pricing and Quoting
The first part of this article (Advice Pricing – Part 1: Pricing Committees and Models) discussed the authority for Pricing Committees, and their core work of developing and maintaining a firm’s pricing models. This second part examines the Pricing Committee’s...
Advice Pricing – Part 1: Pricing Committees and Models
It’s unfortunate but not surprising that the majority of financial advisory firms have been badly caught out in the current marketplace with their old-fashioned, product-based pricing models. A few of these unfortunate firms are proactively experimenting with new...
If You’re Seeking Profits, Try Leadership
Advisers are constantly telling me how hard it is to make money in this marketplace. For me, there are two distinct markets operating at the moment. One is developing nicely, taking on more clients, and looking for more advisory staff. The other is considering cutting...
Exposing the True Colours of Financial Planning Firms
No one is cocky about managing their financial affairs today. That’s exactly why current conditions provide a once in a decade opportunity to stand out as an adviser. Given this opportunity, why aren’t the majority of advisory firms booming? Why aren’t they adding new...
Case Study – Advice Niche for a Petrol Head
Darryn Fellowes openly describes himself as a petrol-head. So it’s not surprising that the first research paper he and his firm researched and published studied the financial complexities of running a successful motor vehicle dealership. He has always loved cars....
Advise or get out of the way
“Adversity is the first path to truth.” Lord Byron Earlier this week, Gavin Chappell from Strategic Wealth Solutions – one of our clients with two offices in Sydney – rang me on his way home. “I was reminded today why I love my job and this business”. He was upbeat as...
8 Tactics to Improve Profitability in Tough Times
A sole focus on profit or business value produces the same result as a sole focus on your scorecard during a game of golf. I don’t believe it works. Good profits or business values are results and outcomes of playing a good game. If your sole focus is profit, it’s...
The Right Allies – Find Them and Keep Them
To grow their firms significantly, most advisers need to learn to move beyond their own existing quality clients and acquire additional ideal clients. Forming strategic alliances with the right professional advisers—such as accountants and lawyers—is one of the best...
3 Steps to Being Successful on Purpose
Financial advisers constantly tell me how frustrated they are about implementing real change in their businesses. “You’ve given me some great ideas,” they say, “but I just can’t seem to get any of them done.” Somehow, real change — even when you strongly desire it —...
Still waiting for prices to peak?
Is this the best of times to sell client bases or your practice? It could be. I believe the answer depends on the following external factors: Client sentiment Government legislation Product makers’ tactics I don’t believe the internal strategies and tactics of...
Enrich Through Your Niche
When you have a reputation for expertise, clients and professional networks will refer new clients who fit your target market An adviser attending one of our recent workshops greeted me and smiled, saying, “I want to thank you because I’m really kicking some goals....
Building Trust with your Clients
“Every adviser knows that if they have to prove that they are worthy of trust, however good may be their arguments, in fact, their trust is gone.” Walter Bagehot (1826-1877). English social scientist and literary critic, editor of The Economist. Regardless of whether...
Current Research – Wealth Management
It has become a truism that wealth managers generate greater success than do other types of financial advisers, and that advisers therefore should move toward the wealth management model. But the term “wealth management” is omnipresent in today’s financial services...
2008 calls for new thinking
Wow, what a start to a new year. We’re nearly at the end of the first quarter of calendar 2008 and we seem to be in whole new territory. Perpetual Investments tell us we had the worst start to a stock market calendar trading year in more than 130 years (“Warning After...
Private Advice Firms with Extraordinary Values – a Breakthrough Achievement
Only a very few firms are worth more than 10 times their earnings, so practices seeking extraordinarily high P/E ratios require breakthrough achievements. James McGregor of Bridges in Sydney recently summed up the common challenge faced by business people building...
Client Change is on the Horizon
There are a few inconvenient truths surrounding the wealth management spoils of 2007. We seem to have forgotten the person who is paying for our party. Our clients. There is a fixation on rock star money pickers or market timers, who have usually taken no personal...
Where’s the Leadership in Financial Planning?
As I write this, the Dow Jones Industrial Average is bumping up against a new record high. It looks like another good Christmas for investment advisers. What has happened to our industry since the last Dow Jones record in January 2000? Obviously the world has changed...
Future-proofing Advice Firm Fees
We’re already in the final quarter of 2007. Time flies when you’re busy, doesn’t it? Do you think this has this been a “once in a lifetime” experience the last few months? Do you think we’ll look back in a few years’ time to 2007 and say, “now, that was a great...
The Lie in Financial Advice Pricing
“A lie told often enough becomes the truth.” Lenin, Russian Communist politician & revolutionary (1870-1924) There’s been a great big lie bouncing around our industry for some time. I can picture a group of really clever product guys and girls brainstorming...
Let’s not forget the client
“Many in the industry are currently distracted by ‘IPO-envy’.” Alan Logan – GM Practice Management, MLC Alan Logan has long been a great commentator of the market. I believe his recent comment is spot on. Bankers and their deals are flocking to our booming industry...
Client Offering – Financial Advice or Financial Care
What a time to be a financial planner. Our biggest product manufacturers – the banks – are making record profits, thanks more and more to the performance of their wealth management divisions. Platinum’s float indicates that one prominent stock picker believes the...
Conditions are great, so why not experiment?
At present, Australian advisers are enjoying the strongest market conditions ever thanks to unique alignment of once-in-a-lifetime superannuation legislation and record stock market levels. The supply of financial advice currently can’t meet the demand for services....
The 3 Core Components of True Wealth Management
A growing number of advisers realise that providing a wealth management proposition to their clients is the key to greater success. But what exactly is wealth management? Is a self-managed superannuation specialist more of a wealth manager than a stockbroker? Whilst...
Profit from a Consultative Approach
As I write this, we’re again briefly reminded of market volatility. China’s main stock index has fallen 8.8%, allegedly caused by rumours of a planned tax on capital gains on shares in China. The reverberations are being felt worldwide. Whilst the investment...
Building leverage in your advice firm: Part 2 – But what about …?
In my previous article (Building leverage in your advice firm: Part 1 - Silos and Staffing), I discussed a number of problems that arise from outdated thinking about how best to progress junior talent in an advisory firm. I advocate bringing your junior talent in to...
Building leverage in your advice firm: Part 1 – Silos and Staffing
I am fascinated by the number of advisory firm principals who still believe the best path forward for junior advisers is in the back room, cutting their teeth on low end clients. If you’re in the business of building an advisory firm, this approach doesn’t make any...
Your 2007 New Year Resolutions
Add these four points to your resolutions for 2007. 1. ASIC – Expect the unexpected: Mr Jeffrey Lucy – head of ASIC – asked us the question “Whose side are you on?” at the last year’s FPA conference. He made very strong points including: “…[client] satisfaction alone...